Judge Kerry Bensinger, Case Number: 24STCV00508, Date: 2024-08-29 Tentative Ruling

This case arises from habitability issues at the property located at 520 San Julian Street, Los Angeles, CA 90013 (“Subject Property”). Plaintiffs Glendella Roberts, Katrina Newman, Lyvette Frost, Schnyra Butler, Frederick Martin, Roy Kissine, Kelli Velasco, Michael Campos, Rickey Barfield, Lester Forest, Karl Hamilton, Billie Hall, James Broadway, Marvin Keller, Khaleelah Phillips, Adolfo Garcia, Leonard Edwards, Ebony Duhaney, Douglas Iles, Jose Munoz, Perry Howell, Sandra Garcia, Arlene Adams, Carolyn Holman, Dirk Robinson, Ronald Walker, Tonnie Smith, Steven Archuleta, Edwin Alvarado, Eric Love, Michael Welch, Kenneth Jiles, and Charles Davie (collectively, Plaintiffs) are low-income bona fide tenants of the Subject Property. The Subject Property is owned by Simone 2015 LP (Simone) and managed by SRHT Property Management Company (SRHT) and John Stewart Company (JSC). Each plaintiff entered into a written lease agreement with Simone.

Throughout Plaintiffs’ tenancies, the Subject Property lacked basic characteristics for human habitation. Plaintiffs consistently complained to Simone, SRHT, and JSC about inadequate weather protection, inadequate plumbing, dampness and mold, inadequate sanitation, lack of heating and ventilation, vermin infestation, structural hazards, inadequate wiring, nuisance, inadequate mechanical equipment, failure to maintain the premises in a good and safe condition, and harassment. The Los Angeles Housing Department (LAHD) inspected the Subject Property numerous times in 2023 and observed various habitability violations. Because the violations persisted, LAHD referred the Subject Property for consideration for placement in a city administered escrow account program. Thereafter, a receivership was appointed.

On January 8, 2024, Plaintiffs commenced this action against Simone, SRHT, and JSC (collectively, Defendants). The operative pleading is the First Amended Complaint (FAC). In the FAC, Plaintiffs allege causes of action against Defendants for:

The first, second, third, fourth, and sixth causes of action are asserted against Defendant Simone only.

Defendants now demur to all causes of action and seek an order striking portions of the FAC.

Plaintiffs filed oppositions to the demurrer and motion to strike. Defendants filed a consolidated reply.

A demurrer for sufficiency tests whether the complaint states a cause of action.¿ (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)¿ When considering demurrers, courts read the allegations liberally and in context, accepting the alleged facts as true.¿ (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)¿ “Because a demurrer challenges defects on the face of the complaint, it can only refer to matters outside the pleading that are subject to judicial notice.”¿ (Arce ex rel. Arce v. Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 556.)

Defendants demur to each cause of action. The arguments are not raised in order (i.e., one, two, three). For ease of reference, the court tracks the order of Defendants’ arguments.

The elements for a breach of the implied warranty of habitability cause of action are: (1) the existence of a material defective condition affecting the premises’ habitability; (2) notice to the landlord of the condition within a reasonable time after the tenant’s discovery of the condition; (3) the landlord was given a reasonable time to correct the deficiency; and (4) resulting damages. (Erlach v. Sierra Asset Servicing, LLC (2014) 226 Cal.App.4th 1281, 1297.)

A warranty of habitability is implied in all residential rental agreements. (See Green v. Superior Court (1974) 10 Cal.3d 616, 629.) The implied warranty imposes upon the landlord the obligation to maintain leased dwellings in a habitable condition throughout the term of the lease. The standard for breach is a substantial defect or statutory noncompliance. (See Smith v. David (1981) 120 Cal.App.3d 101, 109.) Whether the defect is substantial (and thus a cognizable breach) or de minimis (no actionable breach) is decided on a case by case basis. (See Hall v. Municipal Court (1974) 10 Cal.3d 641, 644.) The landlord’s actual or constructive notice of the alleged uninhabitable condition is an essential prerequisite to an actionable breach of warranty claim. (See Peterson v. Superior Court (1995) 10 Cal.4th 1185, 1205-06.)

Defendants argue the breach of implied warranty claim fails for two reasons: (1) the element of notice is not sufficiently pled; (2) the claim is duplicative of the sixth cause of action for violation of Civil Code section 1942.4 and is only an affirmative defense.

The arguments lack merit. First, Plaintiffs allege Defendants had actual and constructive notice of the defective conditions at the Subject Property (FAC ¶ 50); that LAHD inspected the Subject Property numerous times in 2023 and then referred the Subject Property for determination as to whether it should be placed in a city administered escrow account program (FAC ¶ 51); and that Plaintiffs complained about the uninhabitable conditions to Defendants, but the defects were not remedied (FAC ¶ 61). Plaintiffs sufficiently allege Defendants were given notice of the uninhabitable conditions.

Second, the argument that a claim for breach of implied warranty claim and a claim for violation of Civil Code section 1942.4 are mutually exclusive. The claims provide different remedies and arise from different sources—one, in contract, and the other, in statute. Further, violation of breach of the implied warranty is an affirmative defense and a cause of action. (See Erlach, supra, 226 Cal.App.4th at p. 1297 [“In addition to asserting a breach of the habitability warranty as a defense to an unlawful detainer action, a tenant may bring suit against the landlord for damages resulting from such breach.”].)

Defendants argue that the fourth cause of action is duplicative of the third cause of action. However, the fourth cause of action is a tort-based claim; the third cause of action is based in contract. At this stage, Plaintiffs may assert both tort and contract based-claims. (See Bayuk v. Edson (1965) 236 Cal.App.2d 309, 320 [“The same act may be both a tort and a breach of contract. * * * Even where there is a contractual relationship between the parties, a cause of action in tort may sometimes arise out of the negligent manner in which the contractual duty is performed. * * * A tort may grow out of or be coincident with a contract, and the existence of a contractual relationship does not immunize a tortfeasor from tort liability for his wrongful acts in breach of the contract.”].)

“[E]very lease includes a covenant of quiet possession and enjoyment.” (Erlach, supra, 226 Cal.App.4th at p. 1299 (citing Civ. Code, § 1927).) “Minor inconveniences and annoyances are not actionable breaches of the implied covenant of quiet enjoyment.” (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 589.) “To be actionable, the [landlord’s] act or omission must substantially interfere with a [tenant’s] right to use and enjoy the premises for the purposes contemplated by the tenancy.” (Id.)

Defendants argue this cause of action fails for three reasons: (1) the allegations are uncertain as to the severity of interference; (2) the FAC does not plead the element of constructive eviction, and (3) it is duplicative of the third cause of action for breach of implied warranty of habitability. These arguments lack merit.

First, the FAC alleges numerous uninhabitable conditions, including but not limited to bed bugs, mold exposure, and vermin infestations. (See FAC ¶¶ 49-60.) The violations went unabated for such a period of time that a court receiver was appointed. (See FAC ¶ 47.) The substantial interference element is sufficiently pleaded.

Second, constructive eviction is not an element of a breach of quiet enjoyment claim. Indeed, the opposite is true. (See Andrews, supra, 125 Cal.App.4th at pp. 588-590 [as to a claim for breach of the covenant of quiet enjoyment, stating, “[a]lternatively, a tenant may elect to stand upon the lease, remain in possession and sue for breach of contract damages as well as for injunctive relief.”].)

Third, there is no authority for the proposition that a claim for breach of quiet enjoyment is duplicative of a claim for breach of the implied warranty.

The elements of a breach of contract claim are: (1) the existence of a contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

Defendants argue the first cause of action fails because (1) elements one, two, and three are not sufficiently alleged, and (2) it is derivative and duplicative of the third cause of action. The court disagrees.

Plaintiffs allege they either entered into a lease agreement with Simone or Simone assumed the lease that Plaintiffs had previously entered with the prior owner of the Subject Property. (FAC ¶¶ 68, 69.) Plaintiffs allege they performed all of their obligations under the lease. (FAC ¶ 74.) They also allege the specific provisions of the lease agreement that Simone breached. (FAC ¶ 73.) The first three elements are sufficiently pleaded.

Second, Plaintiffs’ breach of contract claim is not duplicative of the third cause of action. The breach of contract claim is based on breaches of specific provisions of the lease agreement (see FAC ¶ 73) whereas the breach of implied warranty claim is based on an implied warranty in all residential lease agreements.

“‘The elements for a cause of action for negligence are well established. They are “(a) a legal duty to use due care; (b) a breach of such legal duty; [and] (c) the breach as the proximate or legal cause of the resulting injury.” (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917.)

The negligence claim is based on Defendants’ failure to make repairs and maintain the Subject Property, to correct substandard conditions, and to supervise their agents and employees who operated and maintained the building. (See FAC ¶ 113.)

On demurrer the court accepts the allegations as true. Here, the FAC alleges that the Defendants owed a duty of care to Plaintiffs which they breached by allowing numerous uninhabitable conditions to exist at the Subject Property.

Civil Code section 1942.4 prevents a landlord from demanding or collecting rent or issue a three-day notice to pay rent or quit if a dwelling substantially lacks the characteristics described in Civil Code section 1941.1 or Health And Safety Code section 17920.10, a public officer has notified the landlord to repair substandard conditions, the conditions have existed and not been abated 35 days beyond the date of that notice, the delay was without good cause, and the conditions were not caused by the tenant or lessee. (Civ. Code § 1942.4, subd. (a)(1) - (4).)

Defendants argue that the FAC does not sufficiently allege the elements of notice and good cause. The court disagrees. As discussed elsewhere, the FAC sufficiently alleges the element of notice. Further, Plaintiffs sufficiently allege that the uninhabitable conditions went unabated for 35 days and existed unabated for so long that a receiver was appointed for the Subject Property. (FAC ¶ 51.)

The Unfair Competition Law (UCL) is codified at Business and Professions Code section 17200 et seq.¿ Section 17204 of the UCL provides that a private person “who has suffered injury in fact and has lost money or property as a result of the unfair competition” may bring a 17200 action.¿ (Bus. & Prof. Code, § 17204.)¿ “To bring a UCL claim, a plaintiff must show either an (1) unlawful, unfair, or fraudulent business act or practice, or (2) unfair, deceptive, untrue or misleading advertising. [Citation.]¿ Because the UCL is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.”¿ (Adhav v. Midway Rent A Car, Inc. (2019) 37 Cal.App.5th 954, 970, citations and quotations omitted.)¿

“A plaintiff alleging unfair business practices under [Bus. & Prof. § 17200] must state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619.) Further, an unfair business practice claim must show the defendant’s conduct is tethered to an underlying constitutional, statutory or regulatory provision…. (See Wilson v. Hynek (2012) 207 Cal.App.4th 999, 1008, quoting Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1366.)

Plaintiffs allege they paid more than the true rental value of the property because of the various defects that decreased its rental value, and that as a result, Defendants received more rental income than they were entitled to. (See FAC ¶ 133.) Plaintiffs further allege that Defendants knowingly leased the Subject Property in a poorly maintained state and preyed on low income tenants. (FAC ¶¶ 131, 133.)

Defendants demur to the seventh cause of action on the grounds that the FAC does not allege any facts to show which of Defendants’ practices were unlawful. Defendants argue that because Plaintiffs do not seek injunctive relief this cause of action should be dismissed.

The arguments are not well taken. First, Plaintiffs have identified Defendants’ unlawful practices, which include but are not limited to: knowingly leasing uninhabitable units at the Subject Property and collecting more rental income than Defendants were entitled to; preying low-income tenants; and violating various statutes such as Civil Code section 1941.1 and 1942.4 and Health & Safety Code section 17920. (See FAC ¶¶ 51, 128, 133, 134.)

Second, although injunctive relief is the primary form of relief available under the UCL, it is not the only equitable remedy available. For instance, a plaintiff in a UCL action may recover restitution. (See Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 337.) Here, Plaintiffs seek restitution.

Los Angeles Municipal Code section 45.33 penalizes a landlord who knowingly and willfully harasses a tenant to his or her detriment and harm, and that serves no lawful purpose. Harassment, in this context includes:

2. Failing to perform and timely complete necessary repairs and maintenance required by Federal, State, County, or local housing, health, or safety laws; or failure to follow applicable industry standards to minimize exposure to noise, dust, lead paint, asbestos, or other building materials with potentially harmful health impacts.

Defendants argue that Plaintiffs do not sufficiently allege the element of intent (knowing and willful harassment). The argument lacks merit. As discussed throughout this ruling, Plaintiffs have alleged numerous uninhabitable conditions. Defendants were made aware of those violations, failed to repair them in a timely manner, and the Subject Property was thereafter referred to for receivership hearings to ensure compliance with habitability laws and ordinances, and a receiver was appointed. It is reasonable to infer that Defendants’ harassment (i.e., failure to repair the uninhabitable conditions) was willful because Defendants did not timely address those conditions despite receiving repeated complaints.

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322(b).) On a motion to strike, the court may: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

“The grounds for a motion to strike are limited to matters appearing on the face of the challenged pleading or matters which must or may be judicially noticed. (§ 437, subd. (a); Evid. Code, §§ 451, 452.).” (Garcia v. Sterling (1985) 176 Cal.App.3d 17, 20.)

Defendants move to strike the first, second, third, and fourth causes of action in their entirety, the request for attorney fees, and the request for punitive damages. The court addresses these arguments in turn.

The challenge to the first, second, third, and fourth causes of action is based on the ground that they are duplicative of other causes of action. The court rejected this same argument in overruling Defendants’ demurrer. Accordingly, the motion to strike the first, second, third, and fourth causes of action on this ground is DENIED.

“Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided.”¿ (Code Civ. Proc., § 1021.)¿ Attorney’s fees are allowable costs under Code of Civil Procedure section 1032 when authorized by contract, statute, or law.¿ (Code Civ. Proc., § 1033.5, subd. (a)(10).)¿¿¿

Here, Civil Code section 1942.4 permits the prevailing party to recover of attorney fees. (See Civ. Code § 1942.4, subd. (b)(2).) Further, Plaintiffs allege that the lease agreements permit the recovery of attorney fees. (See FAC ¶ 77.) Plaintiffs’ request for attorney fees is properly pleaded.

Plaintiffs seek punitive damages against Defendant Simone only in connection with the fourth and sixth causes of action. (See FAC ¶¶ 99, 108, 116, 126.)

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.” (Civ. Code, § 3294, subd. (b).)

Defendants argue the request for punitive damages is not supported by any allegations showing oppression, fraud, or malice. The court disagrees. Plaintiffs have alleged numerous uninhabitable conditions, Defendants’ notice of those condition, and Defendants’ failure to timely abate those conditions. Plaintiffs also allege that Defendants rented units at the Subject Property knowing there were uninhabitable conditions present and further, that Defendants preyed on low-income tenants. The court finds these allegations are sufficient to rise to the level of malice.

Defendants are ordered to serve and file their Answer to the First Amended Complaint within 10 days of the date of this order.

Kerry Bensinger

Judge of the Superior Court